(Filed Under Financial and General Interest News). Sales at Japan-based Wacoal Holding Corporation dipped 0.4% while net income fell 19.2% for the six months ended September 30, 2017. Meanwhile, however, sales rose 9.7% for the firm’s combined European and North American division compared to the same period last year.
Wacoal as a whole earned 7,437 million yen (about $65.1 million at current exchange rates) on sales of 101,976 million yen (about $892.0 million) in the last two quarters, compared to net income of 9,200 million yen (about $80.5 million) on sales of 102,412 million yen (about $896.1 million) in the six months ended September 30, 2016.
Sales in the combined territories of Europe and North America (the company does not break down income from the two continents any further) were 17,458 million yen (about $152.8 million) in the latest six months, representing 17.1% of the company’s total sales for the period. During the six months from April 1, 2016 through September 30, 2016 sales in those territories were 15,910 million yen (about $139.2 million), representing 15.5% of Wacoal’s total sales in the period.
While noting problems in its home Japanese market, Wacoal reported “strong growth was seen in the overseas markets: stable consumer spending in the United States as the employment environment remained favorable; improvement in the consumer sentiment in Europe due to a decline in political risks; and a positive trend of retails sales maintained in China, where its economy recovered from recession.” The company added, “In our overseas business, we are implementing our initiatives to pursue business collaboration among Europe and America and Asian countries, strengthen our ability to respond to the e-commerce market, and improve product quality and cost competitiveness in China and ASEAN-member countries where our product supply bases are located.”
The Wacoal earnings report continued, “Overall sales on a local currency basis from Wacoal International Corp. (U.S.) were driven by the high sales growth achieved through our e-commerce website and third-party e-commerce websites. Further, an increase in the number of department stores handling Wacoal brand products during the first quarter of the current fiscal year resulted in new product delivery, which contributed to the overall sales with an increase of 8% from the corresponding period of the previous fiscal year. Selling, general and administrative expenses, such as costs related to product listing advertisements and website renewal, increased in connection with our initiatives to strengthen e-commerce sales. However, operating income on a local currency basis increased by 33% as compared to operating income for the corresponding period of the previous fiscal year due to a greater percentage of products sold at full price and an increase in the percentage of sales from our own e-commerce website, as well as an increase in revenue which resulted in decreasing percentage of manufacturing overhead as to cost.”
“While sales on a local currency basis for Wacoal Europe fell below such sales for the corresponding period of the previous fiscal year due to the effect of loss of sales that could have been recorded from the brands which were liquidated in France, orders received from our major business partners in the United Kingdom, North Europe and Germany were steady in connection with the expansion of services on our website for retailers (B2B), and sales through third-party e-commerce websites in the United States were also strong. Also, in our underwear business, sales of our plus-size brand “elomi” brands increased by 24% as compared to such sales for the corresponding period of the previous fiscal year, and continued to achieve high growth, while sales of our “Wacoal” brand products also expanded. Sales of our swimwear products under “Fantasie” and “Freya” were also strong during the second quarter of the current fiscal year due to the summer heat wave, and overall sales increased by 5% as compared to such sales for the corresponding period of the previous fiscal year. Operating income improved over budget as a result of the absence of the non-recurring expenses related to the liquidation proceedings for our French subsidiary which we recorded during the corresponding period of the previous fiscal year.” — NM
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